If Biden is in fact crowned king of America, the oil industry he wants to abolish is a harbinger of a looming Greatest Depression. From Tsvetana Paraskova at oilprice.com:
The long-awaited consolidation in the U.S. shale patch is well underway, with several high-profile multi-billion-dollar deals announced in the span of just a few weeks.
Analysts say that the mergers and acquisitions (M&A) frenzy was inevitable; smaller oil firms with manageable debts are trying to survive the pandemic-driven industry downturn, and bigger players are looking to add top-quality assets to their portfolios.
What is also inevitable during this consolidation drive in the U.S. shale patch is the loss of U.S. oil industry jobs as companies combine to reduce fixed cost and administrative expenses and benefit from synergies.
Granted, the oil industry had already started shedding jobs at a fast pace as early as in March, when oil prices crashed in the pandemic, and the brief but very ill-timed Saudi-Russia spat over OPEC+ policies further crushed the market. The U.S. industry has already lost thousands of jobs in the upstream and oilfield services sectors because companies curtailed production at oil prices lower than break-evens and slashed capital spending for this year and next.
While signs have emerged that the worst for employment and rig counts could be over, the M&A mania is leading to another wave of job losses in the U.S. oil sector. However, many of those layoffs could take place in corporate functions and support services. As firms announce deals, they are also announcing layoffs at the new entities. Those redundancies add to an already high number of jobs lost due to the pandemic-inflicted crisis.
Analysts and the market welcomed the latest U.S. oil deals as win-win transactions and perfect fits for the pairs involved. But there is a loser in those mergers and acquisitions—the oil industry jobs.